Girish Mishra

From the last quarter of the 19

th
century onwards, one of the major planks of attack on the
British rule was the process of de-industrialization brought about by its policies !his
process had three components" a# the handicrafts in which a large number of people were
engaged and which had become an integral part of the economy started declining after the
establishment of the $ast %ndia &ompany's rule and this continued without any hindrance
into the ()
th
century* b# the loss in employment opportunities as a result of the decline of
handicrafts was not fully compensated by the establishment of modern industrial units* c#
consequently, the pressure of population on agriculture increased and the share of
agricultural sector in total working population in both absolute and relati+e terms went
up %n other words, there was a transfer of population from non-agricultural +ocations to
agriculture and allies acti+ities !his was completely contrary to what happens when a
country starts on the path of modern economic growth
!ill the beginning of the 19
th
century %ndia was famous for its handicrafts all o+er the
world !hey were not only +ery important items of e,port, but a strong pillar of the
%ndian economy !hey consisted of te,tiles, metal wares, artistic pottery, carpets,
woodwork, etc !hey pro+ided employment opportunities and sources of income to a
large number of people and helped de+elop artistic skills !hey catered largely to the
needs of e,port, aristocrats and other urban dwellers and the army
%n the rural areas there were cottage industries, catering mainly to the needs of the local
people !hey were cheaper and not +ery artistic or of high quality !hey were based on
locally a+ailable raw materials and skills and were produced for local market !here was
a unity between agriculture and +illage industries -hile agriculture supplied food and
raw materials to artisans, the latter supplied implements, ornaments, pottery, cloth,
furniture etc !he barter system pre+ailed in rural areas and there was +ery little use of
money in the process of e,change !hus, +illages, to a large e,tent, were self-sufficient
.mong the industrial acti+ities, the most important was the production of te,tiles, both
cotton and woolen !he production of cotton te,tiles was spread all o+er the country
!hey were produced for daily use as well as for satisfying the needs of e,port markets
abroad and the rich aristocrats at home !he /acca muslin, known all o+er the world, was
the symbol of e,cellence 0e,t to cotton te,tiles were silk cloths for which there was a
craze in foreign markets !he woolen goods of 1ashmir, 2unjab and other areas were
much in demand 3aranasi, 4irzapur, 4oradabad, 0asik, 2une, 5yderabad,
3ishakhapatnam, 6ahore and others areas were famous for metal wares 7ajasthan was
well-known for its enameled jewelry, stone car+ing and arms
.ll these handicrafts entered an era of decline in the second half of the 18
th
century with
the establishment of British rule in %ndia %t meant the weakening of social prestige and
economic power of regional rulers !he disappearance of %ndian rulers and their courts
meant the cessation of almost entire +olume of demand for artistic foods and a great deal
of demand for other urban handicrafts 5andicraftsmen lost their patrons who had been
gi+ing them material help and encouragement to impro+e their skills and indulge in
e,periments to bring in new patterns and designs
5owe+er, the remnants of the old aristocratic sections of the society sur+i+ed but they
could not re+erse the declining fortunes of handicrafts !he sur+i+ing nati+e rulers were
either without the means to sustain their old habits and standards of li+ing
%ndustrial 7e+olution in Britain brought a radical change in the state of economic and
commercial relations with %ndia -ith the emergence of factory system, the scale of
production became unprecedently +ery large for which the British market was utterly
insufficient, and, at the same time, great amounts of raw materials were needed, which
could not be supplied by local sources !hus Britain had to look to %ndia for marketing
manufactures and securing raw materials, minerals and food grains to feed its factories
and a fast growing number of workers 4oreo+er, the British market had to be reser+ed
mostly for its own manufactures !he impact of these changes was felt initially in the
case of cotton te,tiles which was the first to e,perience the process of %ndustrial
7e+olution
British manufacturers began putting pressure on their go+ernment to restrict the sale of
%ndian goods in Britain 5ea+y duties were le+ied on the import of plain cloth 5owe+er,
e+en then %ndian silk and cotton te,tiles could not be displaced from $uropean markets
!he Battle of 2lassey 91:;:#, followed by the grant of /iwani of Bengal, Bihar and
<rissa 91:=;#, made the $nglish $ast %ndia &ompany +irtual ruler %t began using the
re+enues from these pro+inces to finance its e,port trade 2olitical power was used to
dictate terms to craftsmen to sell their goods cheaper, e+en at a loss, to the $ast %ndia
&ompany !hey were con+erted into some sort of bonded labourers and forced to work
for low wages and were forbidden to work for %ndian merchants !he $ast %ndia
&ompany saw to it that it ri+als, both %ndian and foreign, were not in a position to
compete with it and could not offer higher wages and prices to craftsmen !he ser+ants of
the $ast %ndia &ompany monopolized the sale of raw materials and the result was that
craftsmen were charged e,orbitant prices
.fter the %ndustrial 7e+olution began, hea+y duties were imposed on %ndian te,tiles
trying to enter British market !he objecti+e of the British go+ernment was to reser+e and
secure domestic market for British manufactures by imposing prohibiti+e duties on
%ndian goods %ndia was, thus, reduced from the state of a manufacturing to that of an
agricultural country
>p to 181?, %ndian cotton and silk goods were highly competiti+e in British market !hey
could be sold at a price from ;) to =) percent lower than those produced in Britain and
could yet make a profit 55 -ilson noted" @%t consequently became necessary to protect
the latter by duties of :) and 8) percent on their +alue, or by positi+e prohibitionA
British goods were forced upon her without paying any duty, and the foreign
manufacturer employed the arm of political injustice to keep down and ultimately
strangle a competitor with whom he could not ha+e contended on equal terms'
%n 181?, the monopoly of the $ast %ndia &ompany o+er trade with %ndia was abolished to
facilitate the unrestricted entry of British manufactures into %ndia !he $ast %ndia
&ompany ceased to be a trading concern after 18?? and %ndo-British trade from that time
onwards came to be handled by pri+ate traders -hile the British professed free trade in
theory, so far as %ndia was concerned, they practiced it only as regards their e,ports to it
the %ndian products, entering British market, were subjected to hea+y duties
From 18;)s onwards, railways were constructed in %ndia and better roads were built !he
opening of the Buez &anal in 18=9 shortened the distance between $urope and %ndia and,
thus, the time taken in the transportation of goods .ll these de+elopments helped rural
artisans who were till then protected because of the lack of transport and communication
facilities to reach them and had, therefore, preser+ed the isolation of +illages suffered
!he armour of isolated self-sufficient +illages was pierced and ultimately destroyed by
steel rail British manufactures which were much cheaper and much better led to a rapid
decline in demand for the products of +illage artisans and they were rendered jobless
-ith the rise of the railways, the importance of waterways declined and a number of
centres of handicrafts situated on ri+er banks ceased to be commercially significant
4irzapur is a typical e,ample of this
&ities like /elhi, 4urshidabad, 2atna, /acca, 6ucknow and so on became politically
much less important after the establishment of British rule and this ad+ersely affected the
fortunes of craftsmen -ith the disappearance of old administrati+e establishments their
population declined sharply 5ence there was a dearth of buyers for the handicrafts
7uined handicraftsmen became impo+erished and failed to find alternati+e employment
opportunities and had no way out but to become dependent on agricultural sector %n the
rural areas, artisans had been already pushed out of their whole-time or part-time
+ocations and made to seek sources of li+elihood in agricultural sector
%ndian nationalists during the 19
th
and ()
th
centuries, made the policies of the British
go+ernment responsible for the decline of indigenous industries, leading to the process of
de-industrialization and growing pressure of population on land !here ha+e been, on the
other hand, persons absol+ing the British rule of this charge by asserting that there is a
strong likelihood that the traditional sector, generally speaking, did not decline absolutely
in economic significance %t is e+en possible, they argue, that absolute growth occurred,
thereby bolstering the e,pansionist forces in the economy !hey also hold that due to the
efforts of the British, pre-conditions for industrialization were created
%t was /aniel !horner who tried to test the de-industrialization hypothesis 5e
in+estigated the phenomenon on the basis of the census data from 1881 to 19?1 5e did
not deny that %ndian handicrafts declined after the establishment of British dominance
o+er the country, but this was the ine+itable consequence of the %ndustrial 7e+olution and
it was not a phenomenon peculiar to %ndia but a world-wide de+elopment affecting
different countries at different times
!horner formulated the hypothesis as follows" the decline of handicrafts continued well
on into the ()
th
century, that it was not compensated by a sufficient rise in modern
industry, and that in consequence the %ndian economy became more and more
agricultural
!horner argues that there was a possibility that there might ha+e been a major shift of
population from industry to agriculture between 181; and 188), but in the absence of
suitable data nothing can be said with any measure of certainty Further, e+en at the time
of 1881 census almost :; percent of the working force was engaged in agriculture and
allied acti+ities !hus any large e,tent of de-industrialization was not possible 0ew
employment opportunities in the secondary sector were created during 188)s onwards in
modern industries set up in the country and they might ha+e offset the falling
unemployment opportunities due to the decline of handicrafts &onsequently, the
occupational distribution of working force remained unaltered
!horner's analysis and conclusions were challenged by .miya 1umar Bagchi 5e took a
serious objection to !horner's contention that the decline of handicrafts was not a
phenomenon peculiar only to %ndia, but it was a world-wide phenomenon affecting
different countries at different times !he ruin of traditional craftsmen was a painful, but
ine+itable consequence of the %ndustrial 7e+olution
.ccording to Bagchi, this contention ignored the difference in the impact of the industrial
re+olution on the de+eloped and the underde+eloped countries Bagchi argued that de-
industrialization was the ine+itable result of industrialization of de+eloped countries of
today during the 19
th
century because despite unprecedented producti+ity growth in
ad+anced capitalist countries, sustenance of capitalist de+elopment in the 19
th
century
required a continuous transfer of resources from the underde+eloped to the ad+anced
capitalist countries
5e further argues that during the 19
th
century, in the countries of -estern $urope their
own industrial re+olution led to the decline of traditional handicrafts but the people out of
jobs were offered alternati+e opportunities in the newly emerging factories and related
establishments !his was not the case in countries like %ndia %ndustrial 7e+olution in
Britain had, for a long time, an ad+erse impact on employment and income in the
secondary sector in %ndia
%n Britain, the destructi+e effects of the de+elopment of the lead sector of the %ndustrial
7e+olution C the cotton mill industry C were not felt by a +ery large segment of the
population because hand-spinning and wea+ing constituted a relati+ely smaller segment
.s against this, points out Bagchi, in %ndia hand-spinning and handloom wea+ing
constituted the largest traditional non-agricultural acti+ity and employed an enormous
number of people 5ence destructi+e effects on this sector had a generally depressi+e
effect on the rest of the economy
Bagchi has challenged @the doctrine of ruin in traditional handicrafts' on the ground that it
is based on illicit generalization Bagchi looked into the phenomenon of the decline of
employment opportunities in the secondary sector in the areas of Dangetic Bihar 9the old
districts of 2atna, Daya, Bhahabad, 4onghyr, Bhagalpur and 2urnea# during the entire
19
th
century 5e came to the conclusion that there was de-industrialization whose impact
could not be alle+iated by the de+elopment of modern industries and other non-
agricultural acti+ities in and around &alcutta
E 1rishnamurty questioned !horner's conclusion on two counts, namely, the ambiguity
of the concept of de-industrialization, and the objectionable quality of data used by him
5e contended that industrialization and de-industrialization could only be defined in
terms of changes in manufacturing output per capita or per worker engaged
1rishnamurty brought in the pattern of output and the degree of capital intensity in
manufacturing in his analysis /uring the period 19)1-;1 the ratio of workers in
manufacturing to total workers +aried only from 89 percent to 1)F percent 5e further
states, @%n the conte,t of such a limited change, the use of such terms as industrialization
or Gde-industrializationH can be quite misleading unless one is talking in terms of output
or output per capita'
1rishnamurty concluded that e+en though there was a decline in the employment
opportunities in handicrafts, which was not outweighed by increasing employment
opportunities in modern manufacturing sector, yet the total output to the relati+e share of
secondary sector in national income might ha+e gone up
7aghabendra &hattopadhyay challenged 1rishnamurty's arguments 5e objected to the
inclusion of @the share of manufacturing in the total national output' in the definition of
industrialization or de-industrialization 1rishnamurty, on the other hand, rebutted
&hattopadhyay's assertion of de-industrialization as a measurable phenomenon as largely
irrele+ant 5e stated that none of our estimates show sharp and sustained changes in
manufacturing employment and the a+ailable output estimates do not suggest rapid
growth or rapid decline during the period 19))-;) and for the period before 19)), gi+en
the quality of the output and employment estimates, no firm +erdict is possible
4orris / 4orris belie+es that there was no de-industrialization 5e C on the basis of
certain statistical calculations C states that absolute employment in the handloom sector
did not decline between 18)) and 19;)
.ccording to 0eil &harlesworth, in the book @!he British 7ule and the %ndian $conomy',
general statistic on the cotton industry suggests only about one percent factory production
of cotton te,tiles e,ceeded that of handlooms
!hus, there are some important reser+ations about the general e,tent of the de-
industrialization process
%n conclusion we can say that the collapse of handloom industry was not a single uniform
cataclysmic process .reas like Bengal 2residency where British intrusion was the
earliest, the destructi+e impact was felt more acutely Becondly, as most of the handicraft
works was combined with agricultural operations, it is hard to be precise about the
number of industrially employed persons in the 19
th
century !he debate on the e,tent of
de-industrialization in %ndia in the 19
th
century continues till date